Second quarter highlights:     --  Net sales of $445.3 million and earnings of $38.5 million, or 42 cents       per share for the quarter.     --  Diluted earnings per share of 41 cents which excludes special and one       time tax items.     --  Sequential turnaround in Polymer Additives segment.     --  Record Catalysts segment income margin of 22 percent.     --  Net debt reduction of $58 million in the quarter.                                 Second Quarter Ended     Six Months Ended                                     June 30,                June 30,                                     --------                --------   In thousands of dollars,    except per share amounts     2009       2008        2009          2008   -------------------------     ----       ----        ----          ----    Net Sales                 $445,299   $620,750     $931,890   $1,288,927    Operating Profit           $30,991    $77,790      $59,918     $161,604    Net Income attributable    to Albemarle Corporation  $38,493    $61,655      $63,892     $124,916    Diluted earnings per    share                       $0.42      $0.67        $0.70        $1.34    Special item per share      $(0.09)        $-       $(0.09)      $(0.02)    Per share amount for one    time tax items              $0.10         $-        $0.13           $-    Diluted earnings per    share excluding special    and one time tax items      $0.41      $0.67        $0.66        $1.36    

Albemarle Corporation reported second quarter 2009 earnings of $38.5 million, or 42 cents per share, compared to second quarter 2008 earnings of $61.7 million, or 67 cents per share. Second quarter results included a $12.4 million pre-tax special item charge ($8.2 million or 9 cents per share after tax) related to the costs of a final contract settlement arising from the 2008 divestiture of the Port de Bouc, France facility and a $9.2 million (10 cents per share) one time benefit due mainly from a tax issue settlement for the years 2005 through 2007 with the U.S. Internal Revenue Service. The Company reported net sales in the second quarter of 2009 totaling $445.3 million compared to second quarter 2008 net sales of $620.8 million.

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Earnings for the first half of 2009 were $63.9 million, or 70 cents per share, compared to $124.9 million, or $1.34 per share, for the first half of 2008. Excluding the second quarter 2009 special item related to Port de Bouc and the tax benefits related to prior periods, earnings for the first half of 2009 were $60.4 million, or 66 cents per share. Excluding first quarter 2008 restructuring charges, earnings for the first half of 2008 were $127.0 million, or $1.36 per share. Net sales for the first half of 2009 were $931.9 million compared to $1.29 billion for the first half of 2008.

Commenting on results, Mark C. Rohr, Chairman and CEO, stated, "While the challenging economy continues to affect many of our markets, our second quarter results reflect encouraging progress overall. Cost control and some volume gains resulted in significant sequential improvements in our Polymer Additives segment profitability. Our Catalysts business also reported sequential profit improvement, driven by record performance in our polyolefin catalysts division. While our Fine Chemicals business continued to feel the effects of lower production volumes, we are encouraged by a strong new product pipeline in the second half. Through the quarter we ran our manufacturing facilities at reduced rates to better manage inventory levels, which negatively impacted our profit levels for the second consecutive quarter. However, our cost reduction programs overcame the negative absorption and contributed to our sequential performance improvement. We remain confident that our programs to control cost, generate cash, drive new products, and operate more efficiently will enable us to weather this economic downturn."

Quarterly Segment Results

Polymer Additives recorded net sales for the second quarter of 2009 of $172.7 million, a 34 percent decrease versus record net sales in the second quarter of 2008. Continued softness in consumer electronics, automotive and construction sectors contributed to these lower sales. The segment delivered strong net sales improvement on a sequential basis on slow but improved market conditions. Polymer Additives segment income for the second quarter of 2009 was $14.7 million compared to $26.5 million in the second quarter of 2008. The decrease was due primarily to lower sales and production volumes. Our Polymers segment income for second quarter 2009 increased $26.4 million compared to the first quarter of this year.

Catalysts net sales for the second quarter of 2009 were $168.6 million, a decrease of 19 percent versus the second quarter of 2008. This decrease was due primarily to metals impacts on HPC refinery catalysts revenues, currency exchange rates and lower FCC refinery catalysts volumes, partially offset by continued pricing improvements in FCC refinery catalysts and polyolefin catalysts. Catalysts segment income for the second quarter of 2009 was $37.7 million, down 12 percent versus $43.0 million for the second quarter of 2008, but up sequentially from $35.7 million in the first quarter of 2009. Our Catalysts segment generated record overall segment income margins of 22 percent led by record profits from our polyolefin catalysts business and despite a continued impact from high metals costs in our HPC refinery catalysts business. Favorable pricing and equity income in FCC refinery catalysts and overall cost control also contributed to the quarterly profitability.

Fine Chemicals net sales for the second quarter of 2009 were $104.0 million, down 32 percent versus the second quarter of 2008. Segment income for the second quarter of 2009 was $5.2 million compared to $24.5 million in the second quarter of 2008. These declines were primarily attributable to reduced sales and production volumes as well as product mix in fine chemistry services.

We continued to operate our manufacturing facilities across all segments at reduced production rates to control inventory levels.

Cash Flow

In the first half of 2009, cash on hand and cash flow from operations funded net debt repayments of over $85 million, capital expenditures for plant, machinery and equipment of $60 million and dividends to shareholders of $22 million. During the quarter, interest and financing expenses were $6.1 million versus $8.4 million in the second quarter of 2008. This decrease was due primarily to lower average interest rates year over year.

At June 30, 2009, the Company had approximately $172 million in cash and cash equivalents. In addition, the Company has sufficient capacity to borrow under our existing lines of credit and has no significant debt maturities before 2013.

Taxes

Our second quarter 2009 effective income tax rate, excluding the benefits related to the Port de Bouc charge and a tax issue settlement for the years 2005 through 2007, was 14.6 percent. The full year effective tax rate is expected to be approximately 14 percent, down from 18.1 percent in the second quarter of 2008, but comparable to our previous annual effective tax rate forecast. The tax rate continues to be influenced by the level and mix of income and has benefited from a more favorable mix of income in lower tax jurisdictions.

Outlook

Much uncertainty still exists as to the duration of the current global economic downturn and the impacts on the end-markets serviced by our products. However, we are seeing indications of better customer order patterns across our businesses and the benefits of our cost reduction programs. We believe that these dynamics will favorably position us to cope with the continuing challenges in the global marketplace and emerge even stronger in the markets we serve.

Earnings Call

The Company's performance for the second quarter ended June 30, 2009 will be discussed on a conference call at 10:00 AM Eastern Daylight time on July 23, 2009, which can be accessed through Albemarle's website under Investor Information at http://www.albemarle.com/.